The biggest feature of this budget for the markets was the introduction of LTCG which caused the biggest single day market sell off in more than one year. We believe the provision that no LTCG will be levied till shares sold upto march 2018 prompted the investors to rush and sell their holdings and rebuy them lateron. The government should have, in our opinion, made the law effective from 1 february itself, which could have removed the fundamental reason for investors to sell their holding to save on capital gains taxes accumulated by them. We are talking about almost half of market capitalization here. even if 20% market capitalization is churned the market invariably will see 5% and more decline.

Trying to decipher how markets moved from budget to budget and from budget day to end of year is not a lot or at all a meaningful exercise. In our opinion, budgets per se are never are driving force for the market in terms of its core momentum strength nor weakness. It never gets that from the budget. Our observations are either the market has already decided how to move according to the expectations from coming budget or it gives strong reactionary show on the day of budget or during few days ahead. The reactionary behaviour is more seen when some unexpected bad news is put upon the market such as the levy of LTCG in the present 2018-19 budget. The blows like LTCG are not very common announcements for markets out of budget days, so on most other budgets, when the markets are already in strong and clear up or down trend momentum' remain kind of 70% of times a non event type. During the other 30% of times, the market are not in clear directional trend themselves, save taking any clue from markets.

Also, as per some thumb rule behaviour of market, when market is in strong uptrend and there is lack of any bad news, then market will tend to rise, as no bad news is also a good news in market parlance during certain circumstances. On occasions, when the market is in downtrend and gets no bad news then it may just stay where it is or give a small reactionary up move or showcase of strength of a day or two and then resume downtrend. Of many important conclusions we can derive, one is, the markets is that unless there is some dramatic bad news causing compulsory huge sell of, the markets usually do not take budget as much seriously, and resume its usual trend or sideways moves of hitherto.

Also as per the 'theory of discounting' if market has already discounted the good news, it may fall, and if market has already discounted the bad news, it's possible that it may rise. Again these maxim should be observed in the light of the prevailing trend whether up or down.

Another observation, our research team has bound down as conclusion is that budgets are never decisive of market move and mostly supportive of prevailing trend, reactionary for few days or non event on other occasions. Having said that, budgetary provisions may bring dramatic change in stocks of particular sector, for e.g an import duty decrease or export duty rise on say tyres may change the movement of tyre stocks for the next 12 months as the whole EPS and PE facts will alter which are main cause of stock rises most of the times (barring crazy bull run which is only 20% of the entire rally of any bull market, in terms of time frame). Similarly when there is any perks to the middle classs which might possibly increase their disposable income, such as tax breaks in IT returns or increase in tax slab limits etc.; these gives fillip to consumer durable goods firms stocks as more disposable income in hands of middle class income group means more sales for these firms. So, sector specific importance of any budget will continue to remain. Otherwise as stated on 90% of occassions the budget is not a make or break even or even paradigm shifting or trend deciding turn for markets. This is because the markets are very smart these days. They have already analysed the present and pas economic, business and commerce situation in the country and know the possible political upheavals and figure out 90% of the time how 90% of budget would be and discounted 90% of the medium to long term move of the same.

BELOW ARE IMPORTANT HIGHLIGHTS NOT OF JUST BUDGETARY ANNOUNCEMENTS BUT ALSO THE ESTIMATES AND REVISIONS.

**MACROECONOMY MATTERS*** Firmly on course to achieve 8% plus growth
* Achieved average 7.5% growth in first 3 years of govt
* This Budget to consolidate gains of last 4 years' budgets
* India stands out as the fastest growing economy in world
* India a $2.5-trln economy now
* India to become fifth largest economy very soon
* Govt has implemented fundamental structural reforms
* Promised to reduce poverty, build strong India
* Direct transfer mechanism is a global success story
* Will focus on health, infrastructure, senior citizens
* Focus on 'ease of living' for common man
* To move ahead on ease-of-doing business
* Demonetisation has reduced cash in circulation
* Recapitalised banks have better capacity to support growth
* Indirect tax system made simpler with GST
* FDI increased due to govt actions
* Manufacturing sector back on growth path
* There's a premium on honesty because of govt's reforms